Consumer Confidence Index dips to lowest level
December 30, 2008,
New York – After increasing albeit modestly but encouragingly in November, the Conference Board Consumer Confidence Index declined to its all-time low in December to 38.0 (1985=100), down from 44.7 in November.
Sinking less deeply was the Expectations Index, which decreased to 43.8 from 46.2 in November.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS, which claims to be the world’s largest custom research company.
The cutoff date for December’s preliminary results was Dec. 22.
“The further erosion of the Consumer Confidence Index reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008,” said Lynn Franco, director of The Conference Board Consumer Research Center. “The Present Situation Index is now close to levels last seen in the months following the 1990 to 1991 recession, but is not as low as levels reached during the 1981 to 1982 recession. Declines in the Expectations Index appear to be moderating, but this index continues to hover at historical lows.”
Franco continued, noting that both sub-indexes “bear careful watching over the next several months to see if they are starting to show signs of approaching a bottom.”
In the meantime, she added, the overall economic outlook “remains quite dismal for the first half of 2009, and only a modest recovery is expected in the second half.”
The survey also showed that consumers’ appraisal of current conditions grew substantially worse in December. Those claiming business conditions as “bad” increased to 46% from 40.6% last month, and those describing business conditions as “good” declined to 7.7% from 10.1%.
On that same page, consumers’ assessment of the labor market was also considerably more negative than a month ago. Those maintaining that jobs are “hard to get” rose to 42% from 37.1% in November, and those claiming jobs are “plentiful” decreased to 6.2% from 8.7%.
Showing mixed results was consumers’ short-term outlook. Those anticipating business conditions to worsen over the next six months increased to 32.8% from 28.3% in November. But those expecting conditions to improve in that period rose to 13.4% from 11.5%.
The outlook for the labor market was similar. The percent of consumers anticipating fewer jobs in the months ahead increased to 41% from 33.7%, while those expecting more jobs increased to 9.7% from 9.2 percent last month. And the proportion of consumers anticipating an increase in their incomes decreased to 12.7% from 13.1%.
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